Crypto: Dubai Imposes Fine on Three Arrows Capital Founders

Paigambar Mohan Raj
Source: Blockchain News

The founders of Three Arrows Capital, the failed crypto hedge fund, Su Zhu and Kyle Davies, are facing a new fine in Dubai over their new digital-asset exchange, OPNX. According to Dubai’s Virtual Assets Regulatory Authority (VARA), the new company was issued a fine of $2.7 million in May. However, the company has yet to pay the penalty.

Moreover, both Zhu and Davies, along with two other founders, faced individual fines of $54,451, which were paid. The four founders were guilty of not abiding by the rules for marketing, advertising, and promotions. According to VARA,

“VARA shall determine consequential actions warranted against OPNX, which may include further fines, penalties, and/or taking any actions necessary to recover payment and definitively remedy the behavior.”

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Zhu and Davies, along with Mark Lamb and Sudhu Arumugam, founded OPNX earlier this year. The founders presented it as a crypto trading platform. After the collapse of Three Arrows Capital in 2022, the founders turned to Dubai as a key location. Many crypto firms have begun to set their sights on Dubai for its crypto-friendly laws.

Dubai moves against non-compliant crypto firms

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Source: / ShutterStock

In February, VARA noticed OPNX’s customer solicitation and data collection. The regulator reprimanded Chief Executive Officer Leslie Lamb, along with co-founders Mark Lamb and Sudhu Arumugam. Leslie Lamb told Bloomberg in May that OPNX hadn’t been specifically marketed in Dubai or the UAE. She stated that OPNX was cooperating with VARA’s inquiry and didn’t think they breached any rules.

Also Read: Crypto: Dubai’s Financial Regulator Urges Global Watchdogs to ‘Step Up’ Talks

Dubai has adopted a stricter stance on crypto this year. Moreover, they introduced new regulations that demand full licensing by VARA for firms serving retail investors. This is part of the UAE’s broader goal to exit the Financial Action Task Force’s “gray list” of insufficiently vigilant jurisdictions regarding illegal funds.